From the Editor

Pro Farmer Editor Brian Grete takes time to talk with Pro Farmer Members about some of the key issues in each week's Pro Farmer newsletter.

Stuck with give-and-take markets.

Nov 27, 2013

Hello Pro Farmer Members!

Happy Thanksgiving!

I'll admit, it's one of my favorite holidays. Thanksgiving means Iowa's gun season for deer is right around the corner and my family (immediate and extended) has some of the best cooks in the country, so the food is old-country and awesome!

But that's just the surface of Thanksgiving. What, of course, makes Thanksgiving a top-two or top-three holiday on my list is what it stands for - a time to give thanks to God for everything we have. And to be reminded that we come second. I'm sure you've heard or seen the Duck Dynasty bunch - the goofy bunch of redneck duck-call makers from West Monroe, Louisiana. (That's how they describe themselves.) You've probably also heard that Phil Robertson (the founder of the family's duck call empire) was the starting quarterback at Louisiana Tech University ahead of Terry Bradshaw and Robertson gave up the starting role so he could focus on what he really loves to do in the fall... hunt ducks.

The story of Phil Robertson and his wife Kay, however, is a lot more interesting than the building of a duck call business. You can watch why the Robertsons enthusiastically celebrate Thanksgiving here. I, for one, find the story fascinating.

Give-and-Take Markets

Soybean futures made an impressive advance in late trade on Tuesday to get the January contract back to unchanged on the day and to turn momentum back to the upside. That momentum carried over into early trade today and January futures traded to the highest level since Sept. 20. That early upside momentum, however, was erased in late trade today as futures were slammed back into the boundaries of a sideways trading range.

December corn futures were in a grind-it-out rally since posting a low at $4.10 3/4, and challenged resistance near $4.25 in Tuesday's trade before... you guessed it... prices were slammed back into what appears to be a developing sideways trading range between $4.10 and $4.25. From a fundamental view point, that's probably a good thing for now. It will give end-users and importers plenty of opportunity to establish the coverage they need for the winter months.

It's a similar story in December soft red winter wheat futures. After testing resistance near $6.55, the front-month contract dropped back into a $6.30 to $6.55 trading range as U.S. wheat struggles to get competitive in global wheat trade.

Even December hogs seem to be range-bound between $85.50 and $86.50.

But not December cattle futures. An impressive move Tuesday filled the narrow gap between $131.75 and $131.80, triggering a round of aggressive buying in the market today. Now December futures are building in some weather premium, as is deserved with supplies as tight as they are. Any disruption in movement would clearly create a too-tight situation for packers.

This is all part of the demand-building process that's needed every fall. This year, it's especially important for corn and wheat. Corn demand is rebounding nicely with exports running at about twice-the pace of year-ago and ethanol production on a solid pace. Wheat demand, however, still has some work to do to attract the exports it needs to turn prices back to the upside.

But that always seems to be the case with wheat. While countries around the globe undercut our price, the U.S. bides its time and waits for others' export supplies to run thin. It's almost as if the U.S. is wheat importers security blanket... they buy up other supplier's stocks knowing the U.S. will have some wheat left when stocks start running tight.